Company bankruptcies at 40-year low in Okinawa

According to Tokyo Shoko Research, Okinawa branch, 47 companies in Okinawa with liabilities over ¥10 million went bankrupt in fiscal 2016. The number is 14 less than the previous year, and the smallest since 1975 when the company began to keep track on the statistics.

The failed companies had a total of ¥5.1 billion in liabilities that less than half of the previous year and also the lowest since 1975.

For the low level of company failures, Tokyo Shoko Research cites the strong economic expansion in Okinawa Prefecture and the effects of continuing financial assistance from the central government.

There were only 18 bankruptcies during the first half of 2016 that is the fewest ever. Especially, there was no bankruptcy in July. In the second half of 2016, there were 29 cases, which is the second least since fiscal 2009.

The total liabilities dropped blow ¥10 billion for the first time because there was just one major bankruptcy with liabilities over one billion yen.

Most bankruptcies, 14, were in the services sector including restaurants and lifestyle-related businesses. 10 of the failed companies were in the construction industry.

Okinawa Igeto, a wood product wholesaler, was the only major bankruptcy case in 2016 with total ¥1.2 billion in liabilities and ¥60 million in assets. One nursery school also went bankrupt, the first in 29 years and 6 months.

Eight companies went bankrupt in March this year with total liabilities of ¥1.7 billion and ¥66 million in assets.

According to Tokyo Shoko Research analysis, “It is forecast the amount of bankruptcies will continue to stay at low level because there is no likelihood for big changes in the funding environment of small and medium-size enterprises.”